Business

Spectrum Brands, reporting profit, looks to expand

Dave Lumley says one of the things going for his company, Spectrum Brands Holdings Inc., is that when you need its products, you really need them.

Spectrum makes everything from Rayovac batteries to Remington shavers and hair dryers to Cutter bug repellent to Hot Shot insecticide to small appliances

"If a woman's hair dryer goes out today and she is going out tonight, she's buying a new one today," said Lumley, chief executive of the Middleton-based company. "If there are cockroaches running across the kitchen floor, she wants our Hot Shot instant kill now. If you are watching TV and the batteries go out and you can't use your remote, you can't even watch TV anymore. If your toaster breaks, you are not going to go toaster-free for a month."

With a product line that is largely non-discretionary and inexpensive enough not to be greatly impacted by the ups and downs of the economy, Spectrum has been growing and looking to expand in the United States and abroad.

Last week, Spectrum said it posted a profit of nearly $34 million in the second quarter of its fiscal year, reversing a $41.2 million loss from a year earlier that was related to its acquisition of Black & Decker's hardware and home improvement unit.

Spectrum's products often sit side-by-side on shelves with market-leading brands in major retailers such as Walmart, Target and Home Depot. The company's theme is, "Same or better performance/less price." The company says it's an approach that works for consumers and retailers alike in a global economy that remains challenging.

Spectrum sells in more than 140 countries on six continents. About 60% of Spectrum's sales are in the U.S., and about 40% are international.

Lumley said the growth has come as its sales staff in overseas markets introduce new retail lines to customers who already have been receiving its older products, such as batteries.

The company, which started in Madison as Rayovac Corp. and moved its headquarters to Atlanta in 2004 before returning to Wisconsin in 2010 after Lumley became CEO, in particular wants to expand its pet, home and garden, and hardware and home improvement units. Right now, it's interested in smaller acquisitions — companies with annual sales of $30 million to $60 million — to beef up those divisions.

While looking to grow, Spectrum executives say it doesn't bother them if the company's products might be No. 2 or No. 3 in market share at the moment.

"We are really offering a value alternative to the consumer," said Tony Genito, Spectrum's chief financial officer. "In other words, our pitch and our reality is that we make and sell products that last as long, perform just as well, and they cost less. We sometimes have products that perform better and cost the same price."

Over 1,000 employees in state

Spectrum has more than 1,000 employees in Wisconsin. Rayovac alkaline AA and AAA batteries are made in Fennimore, while hearing aid batteries — a growing market for an aging population — are made in Portage.

The company recently announced it would begin selling a Rayovac portable mobile device charger.

Among its other widely known products are Baldwin locks, Stanley hardware, Dingo dog treats, Pfister faucets, George Foreman grills and Spectracide weed killer.

Spectrum filed for bankruptcy in 2009, burdened with debt from acquisitions of garden and pet businesses. The company emerged from bankruptcy later in the year under a debt-for-equity swap.

Lumley, who became CEO in 2010, said the company's effort to become diverse too fast was what got it in trouble in the 2000s. It had the same sales force selling everything, the same team handling research and development, he said. Today, the company's units are organized more individually to compete better in their markets, he said

When it came out of bankruptcy in 2009, Spectrum's shares traded at about $21. Lately, shares have been trading in the low $70s.

One challenge facing the company is the upcoming departure of Genito. The CFO plans to leave the company and return to his family in the Southeast at the end of the year.